What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to efficiency ratios. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on efficiency ratios, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Using revenue instead of cost of sales in the inventory ratios.
- Using total sales when credit sales are given.
- Multiplying by 12 and calling the answer days, or by 365 and calling it months.
- Confusing the inventory turnover period in days with the rate of turnover in times per year. They are reciprocals of each other.
- Saying a shorter receivables period is always better, with no mention of losing customers.
- Ignoring the credit terms actually offered when judging the receivables period.
- Reporting each ratio separately and never connecting them.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Efficiency ratios revision notes.